Forum Business Research Private Limited

In the matter of M/s Forum Business Research Private Limited 301, 1-2-593/7, Seshu Villa, Street No 4 Lane No 4 Domalguda Hyderabad 500029 (Applicant) In exercise of the powers conferred under sub-section (1) of Section 15 of Foreign Exchange Management Act, 1999 and the Regulations/ Rules/ Notifications/ Orders made thereunder, I pass the following Order The applicant has filed the compounding application dated August 27, 2019 received on September 5, 2019 for compounding of contraventions of the provisions of the Foreign Exchange Management Act, 1999 (the FEMA) and the regulations issued thereunder. The contraventions sought to be compounded are (i) delay in reporting receipt of foreign inward remittances and (ii) delay in submission of form FC-GPR to Reserve Bank of India after issue of shares towards subscription to equity (iii) delay in filing of FLA returns in terms of Paragraph 9(1)(A), Paragraph 9(1)(B) and Paragraph 9(2) of Schedule 1 to Foreign Exchange Management Regulations, 2000

Compounding of contraventions under FEMA 1999 M/s Forum Business Research Private Limited CA No. HYD 451 notified vide Notification No. FEMA.20/2000-RB dated May 03, 2000 (hereinafter referred to as Notification No. FEMA 20/2000-RB) as then applicable and Regulation 13.1(3) of Schedule 1 to FEMA 20(R) dated November 7, 2017(hereinafter referred to as Notification No. FEMA 20(R)/2017-RB) as amended from time to time respectively.

2. The relevant facts of the case are as follows: a) The applicant is a resident company incorporated as Private Limited Company under the Companies Act, 1956 on 05/12/2011, with CIN: U74999TG2011PTC077809. The company is engaged in “Computer programming, consultancy and related activities”. b) The applicant had received foreign inward remittances for subscription to equity shares as indicated below: S.No Name of remitter Amount (INR) Date of Date of Receipt reporting 1 MJLM Stohr Beheer B.V. 22,24,300 22-12-2011 06-03-2018 2 FJGE Bolder Eo Rosmalen 2,44,300 22-12-2011 06-03-2018 3 MJLM Stohr Beheer B.V. 29,300 23-12-2011 06-03-2018 4 MJLM Stohr Beheer B.V. 1,99,300 26-07-2012 06-03-2018 5 MJLM Stohr Beheer B.V. 7,91,500 14-08-2012 06-03-2018 6 FJGE Bolder Eo Rosmalen 1,07,100 27-12-2012 06-03-2018 Total 35,95,800 The applicant reported receipt of remittances toward s share subscription amounting to ₹ 35,95,800/- to the Regional Office of Reserve Bank of India with delays ranging from 5 years 1 month 8 days to 6 years 1 month 13 days approximately as indicated above. Whereas in terms of Paragraph 9(1)(A) of Schedule 1 to Notification No. FEMA 20/2000-RB, an Indian company issuing shares or convertible debentures in accordance with these Regulations should report to the Reserve Bank of India as per the prescribed procedure not later than 30 days from the date of receipt of the amount of consideration.

Compounding of contraventions under FEMA 1999 M/s Forum Business Research Private Limited CA No. HYD 451 c) The applicant allotted shares and filed form FC-GPRs as indicated below. S No Name of investor Date of No. of Amount for Date of allotment Shares which shares reporting of shares allotted allotted (INR) 1 FJGE Bolder Eo Rosmalen 05-12-2011 24,500 25,00,000 03-05-2019 MJLM Stohr Beheer B.V. 2,25,500 2 FJGE Bolder Eo Rosmalen 02-01-2013 1,07,100 10,97,900 20-04-2019 MJLM Stohr Beheer B.V. 9,90,800 Total 13,47,900 35,97,900 The applicant filed form FCGPRs for the allotment of shares amounting to ₹ 35,97,900/- which were reported with delays ranging from 6 years 2 months 19 days to 7 years 3 months 28 days approximately beyond the prescribed limit. Whereas in terms of Paragraph 9(1)(B) of Schedule 1 to Notification No. FEMA 20/2000-RB, an Indian company issuing shares in accordance with these Regulations has to submit to Reserve Bank a report in form FCGPR along with documents prescribed therein within 30 days from the date of issue of shares to person resident outside India. d) The applicant had filed FLA (Foreign Liabilities and Assets) Return for 8 years with delays ranging from 3 months 2 days to 7 years 3 months 18 days approximately beyond the stipulated time as shown below: Sl No Particulars Financial Due date of filing Date of actual year filing 1 FLA Return 2011-12 15-07-2012 02-11-2019 2 FLA Return 2012-13 15-07-2013 02-11-2019 3 FLA Return 2013-14 15-07-2014 02-11-2019 4 FLA Return 2014-15 15-07-2015 02-11-2019 5 FLA Return 2015-16 15-07-2016 02-11-2019 6 FLA Return 2016-17 15-07-2017 02-11-2019

Compounding of contraventions under FEMA 1999 M/s Forum Business Research Private Limited CA No. HYD 451 7 FLA Return 2017-18 15-07-2018 02-11-2019 8 FLA Return 2018-19 31-07-2019 02-11-2019 Whereas, in terms of Paragraph 9(2) of Schedule I to Notification No. FEMA 20/2000- RB dated May 03, 2000 as then applicable and Regulation 13.1(3) of Schedule I to FEMA 20(R) dated November 7, 2017, all Indian companies which have received Foreign Direct Investment in the previous year(s) including the current year shall submit to the Reserve Bank of India, on or before the 15th day of July of each year, [a report titled ‘Annual Return on Foreign Liabilities and Assets’ (FLA) as specified by the Reserve Bank from time to time.

3. (a) The applicant was given an opportunity for personal hearing vide Reserve Bank’s letter No. HY.FE.FID/1233/14.66.003/2019-20 dated November 21, 2019 for further submission in person and/or producing documents, if any, in support of the application. (b) The Director of the company, Shri Rajagopal Yadavalli appeared for personal hearing on November 26, 2019 along with Shri J Anil Kumar, Company Secretary. They admitted the contravention for which the compounding has been sought. During the personal hearing it was submitted that the delay was not wilful or with a malafide intention but was on account of lack of awareness of reporting requirements under FEMA. In view of the above, the applicant requested to take a lenient view in disposal of the application. The application for compounding is, therefore, being considered on the basis of the averments made in the application as well the submissions made in this context by the applicant during the personal hearing. 4. I have given my careful consideration to the documents on record. Accordingly, I hold that the applicant has contravened the following FEMA provisions issued in terms of: - (a) Paragraph 9(1)(A) of Schedule 1 to Notification No. FEMA 20/2000-RB for delay in reporting the receipt of consideration towards issue of shares amounting to Compounding of contraventions under FEMA 1999 M/s Forum Business Research Private Limited CA No. HYD 451 ₹ 35,95,800/- and the delay ranges from 5 years 1 month 8 days to 6years 1 month 13 days approximately. (b) Paragraph 9(1)(B) of Schedule 1 to Notification No. 20/2000-RB for delay in submission of Form FC-GPR to Reserve Bank of India after issue of shares to persons resident outside India and the contravention relates to an amount of ₹ 35,97,900/- and the period of contravention ranges from 6 years 2 months 19 days to 7 years 3 months 12 days approximately. (c) Paragraph 9(2) of Schedule 1 to Notification No. 20/2000-RB and Regulation 13.1(3) of Schedule I to Notification No. FEMA 20(R)/2017-RB for delay in filing of FLA returns and the period of contravention ranges from 3 months 2 days to 7 years 3 months 18 days approximately.

5. It has been declared in the compounding application dated August 27, 2019 that the particulars given by the applicant in the application are true and correct to the best of their knowledge and belief. It has been declared in the declaration dated August 27, 2019 that the applicant was not under any enquiry/investigation/adjudication by any agency as on the date of the application and has, in this regard, not informed of initiation of any such enquiry/investigation/adjudication proceedings against it thereafter. It has further been declared that the applicant has not filed any appeal under section 17 or section 19 of FEMA, 1999. Accordingly, the above contraventions which are being compounded under this Order are subject to the veracity of the above declarations made by the applicant and this order is without prejudice to any other action which may be taken by any authority under the extant laws if the said declarations are subsequently discovered to be false and/or incorrect.

6. In terms of Section 13 of the FEMA, any person contravening any provision of the Act shall be liable to a penalty up to thrice the sum involved in such contravention upon adjudication. However, taking into account the relevant facts and circumstances

Compounding of contraventions under FEMA 1999 M/s Forum Business Research Private Limited CA No. HYD 451 of the case as stated in the foregoing paragraphs, I am persuaded to take a lenient view on the amount for which the contravention is to be compounded and I consider that an amount of ₹ 1,77,959/-(Rupees One Lakh Seventy Seven Thousand Nine Hundred Fifty Nine Only) will meet the ends of justice.

7. Accordingly, I compound the admitted contraventions, namely, the contraventions of Paragraph 9(1)(A),Paragraph 9(1)(B), Paragraph 9(2) respectively of Schedule 1 to FEMA 20/2000-RB and Regulation 13.1(3) of Schedule 1 to Notification no. FEMA 20(R)/2017-RB by the applicant on the facts discussed above in terms of the Foreign Exchange (Compounding Proceedings) Rules, 2000 on payment of an amount of ₹ 1,77,959/-(Rupees One Lakh Seventy Seven Thousand Nine Hundred Fifty Nine Only) which shall be deposited by the applicant with the Reserve Bank of India, Foreign Exchange Department, 1st Floor, Saifabad, Hyderabad - 500004 by a demand draft drawn in favour of the "Reserve Bank of India" and payable at Hyderabad within a period of 15 days from the date of this order. In case of failure to deposit the compounded amount within the above mentioned period, Rule 10 of the Foreign Exchange (Compounding Proceedings) Rules, 2000 dated May 3, 2000 shall apply.

The application is disposed of accordingly. Dated this 27th day of November 2019

Sd/- (J Sailaja Rani) Deputy General Manager